Initial U.S. Jobless Claims Fell More Than Forecast to 404,000 Last Week
Jobless Claims
Matthew Staver/Bloomberg
People check the jobs board at a Denver Workforce Center, part of the Denver Office of Economic Development, in Denver, Colorado.
People check the jobs board at a Denver Workforce Center, part of the Denver Office of Economic Development, in Denver, Colorado. Photographer: Matthew Staver/Bloomberg
The number of Americans filing first-time claims for unemployment insurance payments fell more than forecast last week, adding to evidence the labor market is healing.
Applications for jobless benefits decreased 37,000 in the week ended Jan. 15, the biggest decline since February 2010, to 404,000, Labor Department figures showed today. Economists forecast 420,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell, while those getting extended payments rose.
Employers may be retaining workers after the economy showed signs of strengthening at the end of last year. Economic growth may need to accelerate further and encourage companies to ramp up the hiring necessary to reduce an unemployment rate that’s hovering close to a 26-year high.
“New jobless claims have broken to the downside in the last 11 weeks, suggesting that labor markets are finally improving,” Steven Wood, president of Insight Economics LLC in Danville, California, said in an e-mail to clients. “However, there is typically a lot of volatility in the claims data between mid-November and mid-February both because of the various holidays and because of winter weather.”
Stock-index futures pared losses after the report, with the March contract on the Standard & Poor’s 500 Index falling less than 0.1 percent to 1,277.7 at 8:51 a.m. in New York. Treasuries fell, pushing up the yield on the 10-year note to 3.39 percent from 3.34 percent late yesterday.
Range of Estimates
Estimates in the Bloomberg survey of 49 economists ranged from 400,000 to 462,000, after an initially reported 445,000 the previous week.
There were no special factors related to the decline, a Labor Department official said today as the figures were released. Last week’s drop followed a combined 50,000 rise in the previous two weeks, a period when claims typically pick up after the Christmas and New Year’s holidays.
The four-week moving average, a less-volatile measure, dropped to 411,750 from 415,750. Today’s figures coincide with the week the Labor Department surveys for its monthly employment report.
“This typically would be viewed as great news, and it very well could translate into big jobs gains for January, but I caution anyone to read too much into this,” said Ellen Zentner, senior macroeconomist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Continuing Claims
The number of people continuing to collect jobless benefits dropped by 26,000 in the week ended Jan. 8 to 3.86 million. Economist forecast the number would increase to 3.99 million.
The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 29,000 to 4.68 million in the week ended Jan. 1.
President Barack Obama on Dec. 17 signed into law an $858 billion bill extending for two years tax cuts for all income levels. The measure also continues expanded jobless insurance benefits to the long-term unemployed for 13 months and reduces payroll taxes for workers by two percentage points this year.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.1 percent in the week ended Jan. 8, today’s report showed. Forty-three states and territories reported an increase in claims during that week, while 10 had a decrease.
Claims, Payrolls
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
The U.S. added 103,000 jobs in December, fewer than economists forecast in a Bloomberg survey, according to Labor Department figures released Jan. 7. Unemployment fell to 9.4 percent from 9.8 percent a month earlier, partly because fewer people were in the labor force.
“The economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment,” Fed officials said in a statement after their policy meeting on Dec. 14.
Companies continue to reshape their payrolls. Changan Automobile Co., Ford Motor Co.’s automotive partner in China, will invest $7 million in a Plymouth, Michigan, research-and- development operation, employing as many as 161 workers, a Wayne County, Michigan, spokeswoman said Jan. 18.
American Express Co., the biggest credit-card issuer by purchases, said yesterday it will shut a facility in Greensboro, North Carolina, transferring work to other locations in the U.S. and moving some jobs abroad. The changes will result in the loss of 550 jobs.
To contact the reporter on this story: Alexander Kowalski in Washington at akowalski13@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Rate These Stories
Rate this Page